UP sugar mills clear 75% dues for this season

A farmer works in his sugarcane field
Uttar Pradesh sugar mills have paid over Rs 10,000 crore to farmers against sugarcane procurement under the current 2016-17 crushing season.

The payments have been made against total payables of about Rs 13,100 crore for 2016-17, which pegs the payment ratio at over 75 per cent.

Meanwhile, UP sugar mills have collectively paid Rs 17,635 crore against total dues of a little over Rs 18,000 crore for the previous 2015-16 season. The balance of about Rs 368 crore is pending on 13 private sugar mills.

According to UP cane commissioner Vipin Kumar Dwivedi, the government had directed mills to settle full payments and necessary actions were already being taken in this regard.

Meanwhile, the UP mills have produced over 5 million tonnes (MT) of sugar in this season. As per the initial field reports, the mills are expected to produce almost 3.5 MT of additional sugar before the season comes to an end. This would peg the sugar output at roughly 8.5 MT for full season.

Sugarcane is a major cash crop in the state and there are over 4 million rural households engaged in cane farming. Uttar Pradesh and Maharashtra are India's top sugarcane and sugar producers and contribute 50 per cent to India's annual production.

This season, UP is likely to contribute almost 40 per cent to the country's sugar output, much higher than Maharashtra.

Private mills dominate UP sugar sector with 92 of total 117 mills. The cooperative sector comprises 24 mills, while UP State Sugarcane Corporation Limited (UPPSCL) controls one mill.

In the backdrop of UP government announcing a hike of Rs 25/quintal in cane price to Rs 305/quintal, the value of cane procurement by mills is likely to exceed Rs 22,500 crore. This would be 25 per cent more than the value of cane payables clocked by all the 117 UP sugar mills during the previous 2015-16 standing at Rs 18,000 crore.

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